Thread by @C_Barraud

🇨🇳 #China (1) | The question is no longer if, but how hard, the #coronavirus will damage Chinese economy (and its trading partners) in 1Q20.

🇨🇳 #China (2) | A blockage of 16 cities (~50 million people) coupled with the extension of the Lunar New Year holiday and prohibition for Cos to return to work soon implies that 1Q will fall below 6% for the first time since QoQ figures are recorded.

🇨🇳 #China (3) | The impact will probably broaden from retail sales, tourism/transportation...

https://twitter.com/onlyyoontv/status/1221341880794771456

🇨🇳 #China (4) | ... to real estate, production, etc.

https://twitter.com/YuanTalks/status/1221422829205250048

🇲🇴 🇨🇳 #Macau Tourist Arrivals From #China Plunge 80% in Blow for Casinos - Bloomberg
*For the first three days of the holiday, arrivals were down 66%, the data show.
*Link: bloom.bg/2Gn1oZj

🇨🇳 #China | We can now expect officials to launch a fiscal stimulus later (tax cut/public spending) to offset the drag on overall 2020 figures while monetary policy will remain accommodative.

https://twitter.com/C_Barraud/status/1221683691971338241

🇲🇴 🇨🇳 #Macau’s #GoldenWeek Visitors From #China -88.5% on Jan. 27 - Bloomberg (Macau Government Tourist Office)
*For the first four days of the holiday, arrivals were down 75%, the data show.

🌎 Analysts/economists are realizing that their expectations for almost everything are too much optimistic for 2020.

*Latest #IMF forecast for 2020 Global GDP at 3.3% (released last week) will be adjusted ⬇ very soon.

https://twitter.com/C_Barraud/status/1219257777878683649

🌎 🇨🇳 Starbucks Shuts Stores, Apple Sees Disruptions: #Virus Impact - Bloomberg
bloomberg.com/news/articles/…

🇨🇳 🌎 Virus Poses New Threat to Economy’s Fragile Stabilization - Bloomberg
*Link: bloom.bg/2Rybv3H

🇲🇴 🇨🇳 #Macau’s Visitors From #China ⬇ 90.6% YoY on Jan. 28 - Bloomberg (citing Macau Government Tourist Office)
*For the five last days [Jan.24-Jan. 28], arrivals were down 79.2% YoY, the data show.
*Link (Chinese): bit.ly/3aQe4FP

🇨🇳 #CHINA Q1 GROWTH MAY DIP BELOW 5% AS VIRUS SPREADS - GOVT ECONOMIST - RTRS
CHINA GOVT ECONOMIST ESTIMATES THAT IMPACT OF CORONAVIRUS ON CHINA'S ECONOMY COULD BE SIGNIFICANTLY BIGGER THAN THAT OF #SARS OUTBREAK

https://twitter.com/C_Barraud/status/1222090113594904576

🇨🇳 #CHINA GOVT ECONOMIST SAYS BEIJING LIKELY TO STEP UP POLICY SUPPORT FOR ECONOMY, WHICH COULD BOOST BUDGET DEFICIT TO OVER 3% OF GDP IN 2020 - RTRS

https://twitter.com/C_Barraud/status/1221703172705738753

🇨🇳 #China Q1 growth may dip below 5% as virus spreads - Academy of Sciences economist - Reuters
*Link: reut.rs/2t6KcnI

*Chart from BBG ⬇

🇨🇳 #CHINA GOVT SAYS TO STUDY AND IMPLEMENT TAX AND FINANCIAL SUPPORT POLICIES TO DEAL WITH VIRUS OUTBREAK - XINHUA

https://twitter.com/C_Barraud/status/1221703172705738753

🇨🇳 #Copper | The impact on global commodity prices was “virtually zero during the SARS epidemic, but the commodity price and demand impact is likely to be much larger now, given that #China consumes around half of the world’s commodities today,” according to CRU Group.

🇨🇳 At present, #China represents 50% of world copper and 60% of iron ore consumption, up from 20% of copper demand and 25% of iron ore consumption at the time of the SARS outbreak, CRU says in note.

https://twitter.com/C_Barraud/status/1222544132587118593

🇨🇳 Comparison of #China share of global consumption: #smartphones, #semiconductors, #Autos, #oil #zinc, #copper, #steel ⬇

https://twitter.com/Birdyword/status/1222751730003140608

🇨🇳 Businesses Suspend Chinese Operations Amid Coronavirus Fears - WSJ
wsj.com/articles/busin…

🇨🇳 Airlines suspend, scale back direct flights to #China amid virus fears - Reuters
reuters.com/article/us-chi…

🇨🇳 🌎 Chinese are traveling abroad a lot more since the 2003 SARS outbreak, meaning flight cancellations and travel restrictions will likely have a far greater impact on global jet #fuel demand. Visitors to #Japan from #China jumped 19-fold from 2002 to 2018 - Bloomberg

🇲🇴 🇨🇳 #Macau’s Visitors From #China ⬇ 91.8% YoY on Jan. 29 - Bloomberg (citing Macau Government Tourist Office)
*For the six last days [Jan.24-Jan. 29], arrivals were down 81.7% YoY, the data show.
*Link (Chinese): bit.ly/3aQe4FP

🇯🇵 🇨🇳 #BOJ DEPUTY GOVERNOR AMAMIYA : MUST TAKE INTO ACCOUNT FACT #CHINA'S PRESENCE IN GLOBAL ECONOMY IS BIGGER NOW THAN WHEN SARS STRUCK - RTRS

https://twitter.com/C_Barraud/status/1222090113594904576

🇨🇳 #China | The downward 1Q GDP revisions "spiral" has just started and it seems that only one team of economists is understanding the potential impact of the #coronavirus ⬇

bloomberg.com/news/articles/…

🇦🇺🇳🇿 #Coronavirus to hit #Australia GDP (and also #NewZealand) - AFR
afr.com/policy/economy…

The global #copper market has never seen a run of declines like this. The leading industrial metal is on course for an unprecedented series of daily losses, lower for a 12th consecutive session in London - Bloomberg

🇨🇳 #China | It seems that two other things are not priced in:

1/ The public intervention could result in a potential countershock of inflation (global level) by year-end.

2/ The negative impact of the #coronavirus on tourism will last for quarters.

🇨🇳 #China coronavirus could inflict more economic pain than Sars, analysts say - SCMP
*Link: bit.ly/36FlJDy

🇨🇳 It's interesting to note that, on average, Chinese economists and especially those close to the government are more pessimistic than Western economists (or those working for non-Asian banks).

https://twitter.com/C_Barraud/status/1222880629504823302

🇨🇳 🌎 #IMF Monitoring Virus Findings From #WHO, Chinese Authorities - Bloomberg ⬇

🇨🇳 The positive signal from PMI data in January (compared to real expectations) doesn’t reflect the reality. According to the NBS, the survey cutoff date was Jan. 20❗, which implies no impact from #coronavirus.
*Link (Chinese): bit.ly/2tcFxRa

🇨🇳 #China | The worsening health crisis has pushed numerous economists to revise down their forecasts for growth - Bloomberg
*Link: bloom.bg/2UmPI0X

🇨🇳 #Coronavirus May Drag #China GDP Down to 4.5% in First Quarter - Bloomberg
*Link: bloom.bg/2tWeIRS

🇹🇭 #Thailand 2020 growth seen lower than forecast - govt official - Reuters
*Economy is expected to grow less than forecast this year due to the new #coronavirus, a delayed fiscal budget and drought, a government official said on Friday.
uk.reuters.com/article/thaila…

🇯🇵 🇨🇳 *JAL CUSTOMERS CANCEL 25% OF #JAPAN-#CHINA FEB. BOOKINGS: KYODO - BBG

#OOTT 🇨🇳 🌎 | Wood Mackenzie: #China’s #oil demand could be cut by over 250k b/d in 1Q due to the #coronavirus outbreak and subsequent large-scale quarantine measures - Bloomberg
*Woodmac also trimmed its 1Q 2020 global oil demand by 500k b/d.

🇲🇴 🇨🇳 #Macau’s Visitors From #China ⬇ 92.6% YoY on Jan. 30 - Bloomberg (citing Macau Government Tourist Office)
*For the 7 last days [Jan.24-Jan. 30], arrivals were down 83.3% YoY, the data show.
*Link (Chinese): bit.ly/3aQe4FP

🇨🇳 #China’s unemployment risks surge as service providers bear the brunt of coronavirus outbreak - SCMP
scmp.com/economy/china-…

🇨🇳 #China Plant-Closing Cascade May Cost Automakers 1.7 Million Cars - Bloomberg
*Link: bloom.bg/31eFrVO

🇨🇳 #China | As of midday on Saturday, at least 19 provinces, municipalities and regions have told businesses not to resume work before Feb. 10 at the earliest, based on publicly available information - CNBC
*Link: cnb.cx/38XP79N

🇨🇳 #China | Last year, these parts of #China accounted for roughly 80%❗ of national GDP, and 90%❗ of exports, according to CNBC calculations of data accessed through Wind Information.

https://twitter.com/C_Barraud/status/1223611551539716098

🇨🇳 *A meeting of the leading group of the Communist Party of #China Central Committee on the novel coronavirus prevention and control agreed that #Hubei would extend the holiday to an "appropriate extent." - Xinhua
*Link: bit.ly/37PZ0pM

🇨🇳 #China | Railway Passenger Volumes Plummet More Than 70% Amid Coronavirus Outbreak - Caixin
*Link: bit.ly/2RNaYef

🇰🇷 🇨🇳 #SouthKorea exports to #China Y/Y:
*Jan. 1-20: -4.7% YoY (bit.ly/2uXdsOw)
*Jan. (full month): -10.5% YoY (bit.ly/2GWpyu1)

➡ It reflects both the impact of Lunar New Year and #coronavirus.

🇨🇳 14 provinces and cities have said businesses need not start operations until at least the second week of February. They accounted for almost 69% of China’s gross domestic product in 2019, according to Bloomberg calculations.
*Link: bloom.bg/390aXJL

🇨🇳 #China #Oil Demand Has Plunged 20% Because of the Virus Lockdown - Bloomberg
*Link: bloom.bg/2Sd1FDx

🇨🇳 #China Considers Lowering 2020 Growth Expectations on Virus Hit - Bloomberg
*Link: bloom.bg/3943KIE

🇨🇳 #China | Given my nowcast estimate for 1Q20 GDP and the lingering impact on tourism over the year, officials will have to revise downward their target for 2020 even if they will increase public support (bit.ly/2vM94lL)

https://twitter.com/C_Barraud/status/1224319926640529410

🇨🇳 If #China wants to both maintain its 6% target and show goodwill related to U.S. purchases (without too much redicting flows from other partners), they will have to implement a massive fiscal and monetary stimulus which would probably lead to financial instability.

🇨🇳 #China | Therefore, the smart choice (and the most credible) would be to lower the growth target.

https://twitter.com/C_Barraud/status/1224367395718025218

🇨🇳 Outbreak to hit #iPhone output if #China extends Foxconn factory halt - source - Reuters
reuters.com/article/us-chi…

🇲🇴 #Macau Asks Casinos to Suspend Ops for Half A Month - Statement
*Link (Chinese): bit.ly/2SjR1Lr

*Chart from BBG ⬇

🇯🇵 🇨🇳 *KURODA: BELIEVE NEW #CORONAVIRUS IS ALREADY AFFECTING ECONOMY - BBG
*KURODA: VIRUS HAVING EFFECT ON #CHINA ECONOMY, PRODUCTION
*KURODA: CHINA'S ECONOMIC PRESENCE MUCH LARGER THAN DURING SARS
*BOJ'S KURODA: WON'T HESITATE TO EASE MORE IF NECESSARY

🌎 #OOTT | *BP: VIRUS COULD REMOVE 300K-500K B/D OF OIL DEMAND SHORT-TERM - BBG

🇰🇷 🇨🇳 Hyundai Motor Co. said Monday it will inevitably suspend some vehicle assembly lines at its domestic plants due to shortages of Chinese-made auto parts in light of the spreading #coronavirus outbreak - Yonhap
en.yna.co.kr/view/AEN202002…

🇨🇳 A group of mills in Shaanxi, Shanxi, Sichuan and Gansu provinces in #China will cut #steel production by 55,000 tons a day (>30% of the mills’ overall production) - Statement
*Link (Chinese): bit.ly/37UCZ9q

🇨🇳 #China | Hit to Chinese #Property Market From Virus Temporary, Analysts Say - Bloomberg
*The virus has prompted more than 100 Chinese cities to temporarily close property-sales showrooms.
bloomberg.com/news/articles/…

🌎 #Coronavirus and the impact on #oil consumption: Kemp - Reuters
reuters.com/article/china-…

🇨🇳 #China | Tongling Nonferrous Metals Group Co., the country’s second largest #copper smelter, is reducing refined-copper runs by about 20% below capacity - Bloomberg

🇭🇰 The #HongKong government will extend the work-from-home arrangements for its staff by at least another week as officials step up measures against the spread of the deadly coronavirus - SCMP
scmp.com/news/hong-kong…

🇨🇳 🌎 #Coronavirus: World Bank to lower global growth forecast over outbreak - SCMP (citing AFP)
scmp.com/news/world/uni…

🇨🇳 🌏 Looking at the current consensus for #China, #Asia and Global GDP (2020), the impact of the #coronavirus has been largely underpriced (despite recent ⬇ revisions).

🇨🇳 *AIRBUS: #TIANJIN FINAL ASSEMBLY LINE FACILITY CURRENTLY CLOSED - BBG
*AIRBUS TIANJIN PLANT PRODUCES ABOUT 10% OF NARROW-BODY OUTPUT
*AIRBUS CHINA SHUTDOWN TO SLOW NARROW-BODY OUTPUT BY 6/MONTH ❗

🇨🇳 Looking at 1Q20 GDP for #China, there is a huge gap between estimates from independent research firms (lower range) and others (higher range).

🌎 I can't imagine that Global GDP will accelerate in 2020 (v +2.9% in 2019)

https://twitter.com/C_Barraud/status/1224965134705143809

🇭🇰🇨🇳 *H.K.'S LAM SAYS SITUATION IS `WORRYING' - BBG
*SAYS NEXT 14-DAY `VERY CRITICAL'
*SAYS QUARANTINE APPLIES TO H.K., NON-H.K. RESIDENTS
*H.K. TO REQUIRE 14-DAY HOME QUARANTINE OF ALL CHINA ARRIVALS
*H.K.'S LAM SAYS QUARANTINE TO BE EFFECTIVE FEB. 8 MIDNIGHT

🇨🇳 #China Epidemic Threatens a Broader Wave of Defaults in 2020 - Bloomberg
*Link: bloom.bg/3bcdTFc

🇨🇳 #China | A prolonged health emergency could cause banks’ bad loan ratios to triple, ballooning by as much as 5.6 trillion yuan ($800 billion), rating firm S&P Global predicted in a dire assessment on Tuesday - Bloomberg

🇻🇳🇨🇳 #Vietnam-#China Jan trade plummets on new year holiday, virus - Reuters
*Bilateral trade in January fell 25.8% from December and was down 11.8% from a year earlier, the Vietnamese government said in a statement.
*Link: reuters.com/article/us-vie…

🇨🇳 #Tesla warns that coronavirus will hit #China deliveries - BBC
bbc.com/news/51353147

🇨🇳 #China #oil demand is expected to fall by 200K bpd to 13M bpd in 1Q20, which would be the first ⬇ in China's demand since 2009, global energy consultancy Wood Mackenzie said in a report sent to the Global Times on Wednesday.
globaltimes.cn/content/117864…

🇨🇳 #China may delay annual meeting of parliament due to virus outbreak: sources - Reuters
*A postponement would be the first since China adopted the current March schedule in 1995❗ for the meeting of parliament.
reuters.com/article/us-chi…

🌎 Capesize index slides to record low as #China activity stalls - Reuters
reuters.com/article/baltic…

The impact on global value chain becoming visible ⬇

🇨🇳 🇪🇺 Fiat Chrysler warns #coronavirus might shut European plant -FT
ft.com/content/7cef69…

🇨🇳 #CHINA'S #TIANJIN CITY IMPOSES RESIDENTIAL COMPOUND LOCKDOWN - BBG

🇭🇰 #HongKong Airlines to axe 400 jobs as coronavirus adds to financial crisis at troubled carrier - SCMP
scmp.com/news/hong-kong…

🇲🇴Wynn Is Losing $2.5 Million a Day on #Macau Casino Shutdown - Bloomberg
bloomberg.com/news/articles/…

🇨🇳 The collapse I'm observing in my proxies started to be reflected in Cos statements.

*From Yum China Holdings Inc (link: bit.ly/374BYKR) ⬇

🇨🇳 S&P Global Ratings lowered its forecast for #China's 2020 GDP growth to 5.0% (assuming the virus is contained by March).
*Link: bit.ly/37a7cA1

🇨🇳 #China | The consensus still expects 5.8% for 2020.

https://twitter.com/C_Barraud/status/1225691833461686273

🇨🇳 #China | What is also very interesting is that S&P highlights the risk of a counter-shock in 2021 by revising significantly upward their forecast to 6.4%❗
*Link: bit.ly/2H4jT4Q

https://twitter.com/C_Barraud/status/1222808278289305600

🇨🇳 #China | Another survey which suggests that the consensus is very optimistic:
*Bloomberg link: bloom.bg/2UzrDnw

The impact is clearly reverberating around the globe with commodity shippers facing crisis in demand.

🇨🇳 🇨🇱 🌎 Virus Hits Copper Trade as #China Asks #Chile to Defer Cargoes - Bloomberg
bloomberg.com/news/articles/…

As a reminder:

🌎 IMF share of World GDP (PPP) for 2020:
*China: 19.709%
*ASEAN-5: 5.720%
*Japan: 3.938%
*Korea: 1.617%
*Link: bit.ly/2SnzMZD

https://twitter.com/C_Barraud/status/1225691833461686273

🇹🇼 🇨🇳 #Taiwan Jan. Exports to #China Y/Y: -7.9% v +1.8% prior
*Imports from China Y/Y -18.2% v +16.5%

Other Jan. data:

🇻🇳🇨🇳 Bilateral Trade with #Vietnam YoY: -11.8%

🇰🇷 🇨🇳 #SouthKorea:
*Exports to China YoY: -10.5%
*Imports from China YoY: -9.6%

🇧🇷 🇨🇳 #Brazil
*Exports to China YoY: -8.8%
*Imports from China YoY: -0.5%

🇨🇳 🇨🇱 🇳🇬 Chinese #copper traders declare force majeure over #coronavirus - FT
ft.com/content/e3d6b1…

🇻🇳🇨🇳 #Vietnam faces loss up to $7.7 billion in tourism due to #China's #coronavirus: state media - Reuters
reuters.com/article/us-chi…

🇺🇸 🇨🇳 Majority of U.S. firms in #China see revenue hit from #coronavirus: AmCham survey - Reuters
*Nearly a quarter of the firms forecast revenue would fall by at least 16% this year due to the outbreak.
reuters.com/article/us-chi…

🇨🇳 Burberry Says Viral Epidemic Devastates #China Sales - Bloomberg
*Sales at China stores that remain open down 70%-80%, CFO says.
*Link: bloom.bg/3biRFkX

🇨🇳 🇺🇸 #WhiteHouse sees minimal impact on U.S. economy from #China's #coronavirus - Reuters
*Link: reut.rs/31DiX0I

🇨🇳 #China 1Q estimate | Now we're talking seriously. From 4.9% to 1.0% in a few days ⬇

➡ Haibin Zhu, a China equity strategist at JPMorgan, also cut his China GDP growth estimate to 1% for the first quarter - CNBC
cnbc.com/2020/02/07/sto…

🇨🇳 🌎 #Coronavirus: Pressure grows to re-open factories -BBC
*Link: bbc.in/2vf8E7f